RISE Education Cayman (REDU) Reports Q4 Revenues of $55.9M

RISE Education Cayman (NASDAQ: REDU) reported Q4 revenue for the quarter came in at $55.9 million.

Fourth Quarter of 2020 Financial and Operational Summary

• Total revenues were RMB364.5 million (US$55.9 million) for the fourth quarter of 2020, compared with RMB320.0 million for the preceding quarter and RMB416.2 million for the fourth quarter of 2019.
• Net income attributable to RISE[1] was RMB1.4 million (US$0.2 million) for the fourth quarter of 2020, compared with RMB28.0 million for the preceding quarter and RMB51.1 million for the fourth quarter of 2019.
• Non-GAAP net income attributable to RISE was RMB55.4 million (US$8.5 million) for the fourth quarter of 2020, compared with RMB35.7 million for the preceding quarter and RMB66.1 million for the fourth quarter of 2019.
• Adjusted EBITDA[2] income was RMB85.3 million (US$13.1 million) for the fourth quarter of 2020, compared with RMB57.8 million for the preceding quarter and RMB91.0 million for the fourth quarter of 2019.
• Students in class[3] for Rise regular courses (including Rise Start and Rise On programs) were 47,724 as of December 31, 2020, a decrease of 2,738 from 50,462 as of September 30, 2020 and a decrease of 6,659 from 54,383 as of December 31, 2019.
• New students enrolled[4] for Rise regular courses in the fourth quarter of 2020 were 8,023, compared with 8,328 for the preceding quarter and 6,200 for the fourth quarter of 2019. New students enrolled for other Rise courses (including Rise Up, Can-Talk, other Rise online courses, STEAM, courses provided by The Edge learning centers and light courses) were 3,231 in the fourth quarter of 2020, compared with 2,510 for the preceding quarter and 1,098 for the fourth quarter of 2019.
• The total number of the Company's learning centers as of December 31, 2020 was 512, consisting of 92 self-owned (including 2 operated by The Edge) and 420 franchised learning centers.

Ms. Lihong Wang, Chairwoman and Chief Executive Officer of RISE, commented, "We have gained deep insights from an unprecedented year of challenges in 2020 and took immediate actions to stabilize the business with the quick deployment of our online-merge-offline, or OMO strategy, and gradually recovered from the impact of COVID-19 with various initiatives. Almost all of our offline learning centers resumed normal operation in the fourth quarter as China's containment of the pandemic gradually returned life to normalcy. With a strong OMO strategy and online curriculum acting as the 'business stabilizer' when circumstances demand, we saw significant growth in new students enrolled for RISE regular courses as well as for other courses on a yearly basis. Total revenues reached the high end of our guidance, and adjusted EBITDA was close to the level of the fourth quarter of 2019. These successful initiatives have allowed us to navigate this new environment amid COVID-19 and positioned us well to seize new growth opportunities. In 2021, although the re-emergence of COVID-19 in certain parts of China had an adverse impact on our offline business in the first quarter, we were able to respond promptly with our proven OMO courses, which had again demonstrated to be highly effective. As the re-emergence of COVID-19 cases were well contained in February, we expect to re-open the temporarily closed learning centers by the end of March, in line with the pace of China's reopening regulation."

Mr. Warren Wang, Chief Financial Officer of RISE, added, "Total revenue reached the high end of our guidance at RMB364.5million in the fourth quarter, up 13.9% from the prior quarter. In addition, we continued to see a significant improvement in our non-GAAP net income attributable to RISE, which reached RMB55.4 million, an increase of 55% quarter-over-quarter. Our adjusted EBITDA was RMB85.3 million, close to the level of the fourth quarter of 2019. This quarter saw solid growth momentum in new student enrollments for our regular courses which increased 29% year-over-year, demonstrating the high recognition and positive feedback of our courses among parents and students. However, due to the cumulative impact from the closure of our self-owned learning centers during the first three quarters of 2020, our new students enrollment number was lower than the normal levels. In addition, with offline classes resumed, large amount of students completed their course and graduated from Rise. As a result, total number of students in class saw a 5.4% decline quarter-over-quarter. However, this should be short term phenomena, as new student enrollments continued to gain traction with healthy growth over the last two quarters and onward, plus retention rate is trending up in the fourth quarter. By leveraging our proven OMO strategy and strong monetization capability, we expect further recovery in the first half of 2021 should the pandemic situation continue to ease in China. We remain confident in our direction to deliver sustainable growth and profitability in the long term."

For earnings history and earnings-related data on RISE Education Cayman (REDU) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Evogene chairman to address dissident shareholders on results call
• HeartCore Enterprises, Inc. (HTCR) Misses Q2 EPS by 185c